AerCap Holdings N.V. Reports Third Quarter 2011 Financial Results

AMSTERDAM, Nov. 8, 2011 /PRNewswire/ -- AerCap Holdings N.V. (the "Company" or "AerCap") (NYSE: AER) today announced the results of its operations for the third quarter ended September 30, 2011.

Third Quarter 2011 Highlights

Net income

  • Third quarter 2011 reported net loss was $7.1 million, compared with reported net income of $51.9 million for the same period in 2010.
  • Third quarter 2011 adjusted net income was $75.6 million, an increase of 24% compared to third quarter 2010 adjusted net income of $61.1 million. Adjusted net income excludes $29.2 million of non-cash charges relating to the mark-to-market of interest rate caps and share-based compensation. In addition, adjusted net income excludes certain one-time charges incurred in connection with the AeroTurbine sale which closed on October 7, 2011 and is reflected as a discontinued operation for the third quarter financial results. Those charges include $22.5 million of one-time transaction expenses, $10.0 million deferred tax asset write-off, and a $21.0 million book loss arising from the sale.

Earnings per share

  • Third quarter 2011 reported basic and diluted loss per share was $0.05, compared with reported basic and diluted earnings per share of $0.43 for the same period in 2010.
  • Third quarter 2011 adjusted basic and diluted earnings per share, which excludes the items mentioned above, was $0.51, unchanged from the same period in 2010.

Other financial highlights

  • Margin earned on lease assets (net spread) was $182.3 million in the third quarter of 2011 compared to $164.4 million in the third quarter of 2010, an increase of 11%.
  • Committed purchases of aviation assets delivered or scheduled for delivery in 2011 are $934 million.
  • Total assets were $9.6 billion at September 30, 2011, an increase of 2% over total assets of $9.3 billion at September 30, 2010. The increase was driven primarily by deliveries of forward order aircraft.
  • Debt to equity ratio was 2.8 times at September 30, 2011, compared to 3.3 times at September 30, 2010.
  • To date we have purchased 9.4 million shares at an average price of $10.64 per share which completes our $100 million share repurchase program for 2011.
  • AerCap signed a $400 million credit facility to provide long term financing for 12 Boeing 737-800 aircraft. The aircraft will be leased to American Airlines and form part of AerCap's previously announced transaction with American Airlines for the purchase and leaseback of up to 35 Boeing 737-800 aircraft.

Aengus Kelly, CEO of AerCap, commented: "AerCap's third quarter operating profit demonstrates our ability to deliver strong results even in an uncertain economic environment. Our strong balance sheet, reflected by our conservative 2.8 times debt equity ratio, has afforded us the financial flexibility to return capital to shareholders via our executed $100 million share repurchase program at a 33% discount to book value."

AerCap's CFO, Keith Helming, added: "Notwithstanding adverse global market conditions, AerCap's capital position has never been stronger. With the recently completed AeroTurbine sale our total cash position exceeds $600 million. Also, we have arranged all aircraft funding requirements through 2012 including the financing for the aircraft to be delivered under the American Airlines purchase and leaseback arrangement. As a result, AerCap is extremely well positioned to take advantage of market opportunities that might arise in the coming year."

Summary of Financial Results




Three months ended
September 30,


Nine months ended
September 30,



2011


2010


% increase/  (decrease)


2011


2010


% increase/  (decrease)














Net income (loss)


$                    (7.1)


$                    51.9


(114%)


$                    95.8


$                  135.1


(29%)

Plus: mark-to-market of interest rate caps, net of tax


27.6


9.0


207%


47.9


30.8


56%

        share-based compensation, net of tax


1.6


0.2


700%


4.1


1.5


173%

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation


22.1


61.1


(64%)


147.8


167.4


(12%)

Plus: loss on discontinued operations


53.5


-


-


54.1


-


-

        buy-out of the Genesis portfolio servicing rights


-


-


-


21.4


-


-

Adjusted net income


$                    75.6


$                    61.1


24%


$                  223.3


$                  167.4


33%




Revenue breakdown



Three months ended
September 30,


Nine months ended
September 30,



2011


2010


% increase/  (decrease)


2011


2010


% increase/  (decrease)














Lease revenue:













  Basic lease rents


$                  238.6


$                  225.1


6%


$                  714.1


$                  605.1


18%

  Maintenance rents and other receipts


27.0


14.3


89%


73.3


42.8


71%

Lease revenue


$                  265.6


$                  239.4


11%


$                  787.4


$                  647.9


22%

Sales revenue


65.5


167.9


(61%)


100.9


591.9


(83%)

Management fees and interest income


5.3


3.9


36%


16.7


12.3


36%

Other revenue


1.4


0.9


56%


4.2


3.8


11%

Total revenue


$                  337.8


$                  412.1


(18%)


$                  909.2


$               1,255.9


(28%)
















Basic lease rents were $238.6 million for the third quarter of 2011, an increase of 6% compared to the third quarter of 2010, as a result of our growing asset base. Our average lease assets increased by 6% to $8.0 billion compared to the third quarter of 2010.

Total lease revenue (basic rents, maintenance rents and other receipts) for the third quarter of 2011 was $265.6 million, compared to $239.4 million for the same period in 2010, an increase of 11%. The increases were mainly due to the deliveries of forward order aircraft.

Sales revenue for the third quarter of 2011 was $65.5 million, compared to $167.9 million for the same period in 2010. Sales revenue for the third quarter of 2011 was generated from the sale of six older aircraft. Sales revenue for the third quarter of 2010 was higher than the third quarter of 2011 due to the sale of one new A330 aircraft and two new A320 aircraft.

Total revenue for the third quarter of 2011 was $337.8 million, compared to $412.1 million for the same period in 2010 for the reasons mentioned above.



Three months ended
September 30,


Nine months ended
September 30,



2011


2010


% increase/  (decrease)


2011


2010


% increase/  (decrease)














Basic lease rents


$                  238.6


$                  225.1


6%


$                  714.1


$                  605.1


18%














Interest on debt


$                    88.1

(a)

$                    73.6


20%


$                  229.7


$                  197.4


16%

Plus: mark-to-market of interest rate caps


(31.8)


(12.9)


(147%)


(55.4)


(47.2)


(17%)

Interest on debt excluding the impact of mark-to-market of interest rate caps


$                    56.3


$                    60.7


(7%)


$                  174.3


$                  150.2


16%














Net Spread  


$                  182.3


$                  164.4


11%


$                  539.8


$                  454.9


19%


(a) Interest on debt for the quarter ended September 30, 2011 includes $7.8 million of amortization of debt issuance costs.





As shown in the table above, interest expense excluding the impact of the mark-to-market of interest rate caps was $56.3 million in the third quarter of 2011, a 7% decrease compared to the third quarter of 2010. As a result, net spread increased 11% to $182.3 million in the third quarter of 2011 over the same period in 2010.

Selling, general and administrative expenses breakdown



Three months ended
September 30,


Nine months ended
September 30,



2011


2010


% increase/  (decrease)


2011


2010


% increase/  (decrease)














Aircraft management fees


$                        -


$                      1.4


(100%)


$                    26.7

(a)

$                      4.6


480%

Mark-to-market of foreign currency hedges, foreign currency balances and other derivatives


11.4


(8.5)


234%


3.9


(1.4)


379%

Share-based compensation expenses


1.8


0.4


350%


4.7


1.8


161%

Other selling, general and administrative expenses


18.8


18.5


2%


63.0


52.2


21%

Total selling, general and administrative expenses


$                    32.0


$                    11.8


172%


$                    98.3


$                    57.2


72%


(a) Includes a one-time charge of $24.5 million relating to the buy-out of the Genesis portfolio servicing rights.




Effective tax rate

AerCap's blended effective tax rate during the first nine months of 2011 was 6.6%. The blended effective tax rate in 2010 was 8.6%.

Financial position



September 30, 2011


September 30, 2010


% Increase/(decrease) over
September 30, 2010








Total cash (incl. restricted)


$                  485.0


$                  519.7


(7%)

Flight equipment held for lease


7,936.0


7,974.1


(0%)

Total assets


9,553.4


9,338.6


2%

Debt


6,200.7


6,562.3


(6%)

Total liabilities


7,308.5


7,358.1


(1%)

Total equity


2,244.9


1,980.5


13%








Debt/equity ratio


2.8


3.3


(15%)



As of September 30, 2011, AerCap's portfolio consisted of 359 aircraft and 8 engines that were either owned, on order, under contract or letter of intent, or managed. The portfolio information excludes all engines and aircraft owned by AeroTurbine at September 30, 2011.

Notes Regarding Financial Information Presented In This Press Release

The financial information presented in this press release is not audited.

The following is a definition of non-GAAP measures used in this press release and a reconciliation of such measure to the most closely related GAAP measure:

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation. This measure is determined by adding non-cash charges related to the mark-to-market losses on our interest rate caps and share based compensation during the applicable period, net of related tax benefits, to GAAP net income. In addition to GAAP net income, we believe this measure may provide investors with supplemental information regarding our operational performance and may further assist investors in their understanding of our operational performance in relation to past and future reporting periods. We use interest rate caps to allow us to benefit from decreasing interest rates and protect against the negative impact of rising interest rates on our floating rate debt. Management determines the appropriate level of caps in any period with reference to the mix of floating and fixed cash inflows from our lease and other contracts. We do not apply hedge accounting to our interest rate caps. As a result, we recognize the change in fair value of the interest rate caps in our income statement during each period. Following is a reconciliation of net income excluding the impact of the mark-to-market of interest rate caps and share-based compensation to net income for the three- and nine -month periods ended September 30, 2011 and 2010:



Three months ended
September 30,


Nine months ended
September 30,



2011


2010


% increase/  (decrease)


2011


2010


% increase/  (decrease)














Net income (loss)


$                    (7.1)


$                    51.9


(114%)


$                    95.8


$                  135.1


(29%)

Plus: mark-to-market of interest rate caps, net of tax


27.6


9.0


207%


47.9


30.8


56%

        share-based compensation, net of tax


1.6


0.2


700%


4.1


1.5


173%

Net income excluding the impact of mark-to-market of interest rate caps and share-based compensation


$                    22.1

(a)

$                    61.1


(64%)


$                  147.8

(b)

$                  167.4


(12%)


(a) Adjusted net income for the third quarter 2011 excluding the mark-to-market of interest rate caps, share-based compensation and the one-time charges relating to the sale of AeroTurbine was $75.6 million, an increase of 24% compared to the third quarter of 2010 on the same basis.


(b) Adjusted net income for the nine months ended September 30, 2011 excluding the mark-to-market of interest rate caps, share-based compensation, the buy out of the third party servicing contract and the one-time charges relating to the sale of AeroTurbine was $223.3 million, an increase of 33% compared to the nine months ended September 30, 2010 on the same basis.




Adjusted earnings per share are determined by dividing the amount of adjusted net income by the average number of shares outstanding for that period. The average number of shares is based on a daily average.

Net spread (refer to second table under Revenue breakdown section of this press release). This measure is the difference between basic lease rents and interest expense excluding the impact from the mark-to-market of interest rate caps. We believe this measure may further assist investors in their understanding of the changes and trends related to the earnings of our leasing activities. This measure reflects the impact from changes in the number of aircraft leased, lease rates, utilization rates, as well as the impact from the use of interest rate caps instead of swaps to hedge our interest rate risk. The reconciliation of net spread to basic rents for the three- and nine -month periods ended September 30, 2011 and 2010 is included above.

Conference Call

In connection with the earnings release, management will host an earnings conference call today, Tuesday, November 8, 2011 at 9:30 am Eastern Time / 3:30 pm Central European Time. The call can be accessed live by dialing (U.S./Canada) 1-480-629-9771 or (International) +31-20-794-8504 and referencing code 4474210 at least 5 minutes before start time, or by visiting AerCap's website at http://www.aercap.com under "Investor Relations".

The webcast replay will be archived in the "Investor Relations" section of the company's website for one year.

In addition, a New York Group Lunch Presentation for investors and analysts will be hosted by AerCap's management today, Tuesday, November 8, 2011, at 12:30 pm Eastern Time at The New York Palace (the Henry Room), 455 Madison Avenue, New York. Doors will open at 12:00 pm.

To participate in either event, please register at: http://client.sharedvalue.net/AerCap/Q311

For further information, contact Peter Wortel: +31 20 655 9658 (pwortel@aercap.com)

or Mark Walter (Shared Value): +44 (0)20 7321 5039 (aercap@sharedvalue.net).

About AerCap Holdings N.V.

AerCap is the world's leading independent aircraft leasing company and has one of the youngest fleets in the industry. AerCap has $9.6 billion of assets on its balance sheet and 359 aircraft and 8 engines with a focus on fuel-efficient narrowbodies and widebodies. AerCap is a New York Stock Exchange-listed company (AER) headquartered in The Netherlands with offices in Ireland, the United States, China, Singapore, the United Arab Emirates, and the United Kingdom.

Forward Looking Statements

This press release contains certain statements, estimates and forecasts with respect to future performance and events. These statements, estimates and forecasts are "forward-looking statements". In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "should," "expect," "plan," "intend," "estimate," "anticipate," "believe," "predict," "potential" or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this press release are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied in the forward-looking statements. As a result, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate or correct. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this press release might not occur. Accordingly, you should not rely upon forward-looking statements as a prediction of actual results and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. We do not undertake any obligation to, and will not, update any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information regarding AerCap and to be added to our email distribution list, please visit http://www.aercap.com.

For Investors:
Keith Helming
Chief Financial Officer
+31 20 655 9670
khelming@aercap.com

Peter Wortel
Investor Relations
+31 20 655 9658
pwortel@aercap.com

For Media:
Frauke Oberdieck
Corporate Communications
+31 20 655 9616
foberdieck@aercap.com

 AerCap Holdings N.V.

Consolidated Balance Sheets - Unaudited

(In thousands of U.S. Dollars)












September 30, 2011


December 31, 2010


September 30, 2010










Assets








Cash and cash equivalents


$                                   274,337


$                                   404,450


$                                   285,763


Restricted cash


210,631


222,464


233,954


Trade receivables, net of provisions


13,353


49,055


60,001


Flight equipment held for operating leases, net


7,936,045


8,061,260


7,974,109


Net investment in direct finance leases


26,193


30,069


28,170


Notes receivables, net of provisions


7,073


15,497


7,939


Prepayments on flight equipment


81,524


199,417


197,616


Investments


81,686


72,985


30,774


Goodwill


-


6,776


6,776


Intangibles, net


34,232


58,637


64,568


Inventory


16,470


121,085


119,097


Derivative assets


24,165


55,211


23,981


Deferred income taxes


101,235


94,560


102,117


Other assets


184,597


209,141


203,715


Disposal group assets (AeroTurbine)


561,843


-


-


Total Assets


$                                9,553,384


$                                9,600,607


$                                9,338,580










Liabilities and Equity
















Accounts payable


$                                       5,931


$                                     16,045


$                                     17,516


Accrued expenses and other liabilities


73,027


121,389


98,149


Accrued maintenance liability


427,989


420,824


400,461


Lessee deposit liability


100,783


130,031


138,316


Debt


6,200,711

*

6,566,163


6,562,293


Accrual for onerous contracts


6,209


12,928


10,917


Deferred revenue


48,440


60,061


66,106


Derivative liabilities


36,459


55,769


64,302


Disposal group liabilities (AeroTurbine)


408,917


-


-


Total liabilities


7,308,466


7,383,210


7,358,060










Share capital


1,570


1,570


1,163


Additional paid-in capital


1,338,736


1,333,025


968,724


Treasury stock


(60,632)


-


-


Accumulated other comprehensive income


(8,351)


5,005


(470)


Retained earnings


967,586


871,750


799,309


Total AerCap Holdings N.V. shareholders' equity


2,238,909


2,211,350


1,768,726


Non-controlling interest


6,009


6,047


211,794


Total Equity


2,244,918


2,217,397


1,980,520










Total Liabilities and Equity


$                                9,553,384


$                                9,600,607


$                                9,338,580










* Includes $64.3 million of subordinated debt received from our joint venture partners












Supplemental information


September 30, 2011


December 31, 2010


September 30, 2010


Debt/equity ratio


2.8


3.0


3.3


Debt/equity ratio (adjusted for subordinated debt)


2.7


2.8


3.1



AerCap Holdings N.V.

Consolidated Income Statements - Unaudited

(In thousands of U.S. Dollars, except share and per share data)




Three months ended
September 30,

Nine months ended
September 30,




2011


2010


2011


2010












Revenues










Lease revenue


$                           265,562


$                           239,389


$                           787,339


$                           647,824


Sales revenue


65,538


167,862


100,865


591,925


Management fee revenue


4,637


3,247


14,874


8,918


Interest revenue


668


668


1,849


3,377


Other revenue


1,438


946


4,249


3,827


Total Revenues


337,843


412,112


909,176


1,255,871












Expenses










Depreciation


90,135


83,548


271,378


220,991


Asset impairment


3,834


2,761


11,583


5,482


Cost of goods sold


61,562


160,142


91,706


555,524


Interest on debt


88,074


73,606


229,691


197,375


Operating lease in costs


3,017


3,057


9,057


9,271


Leasing expenses


13,478


14,405


43,258


32,666


Provision for doubtful notes and accounts receivable


-


-


2,311


-


Selling, general and administrative expenses


32,018


11,784


98,265


57,198


Total Expenses


292,118


349,303


757,249


1,078,507












Income from continuing operations before income taxes


45,725


62,809


151,927


177,364












Provision for income taxes


(2,532)


(5,263)


(10,086)


(15,877)


Net Income of investments accounted for under the equity method


3,340


1,067


8,511


2,313


Income (loss) from discontinued operations (AeroTurbine, including loss on disposal), net of tax


(53,481)


824


(54,063)


(2,774)


Bargain purchase gain ("Amalgamation gain"), net of transaction expenses


-


-


-


274












Net Income (loss)


(6,948)


59,437


96,289


161,300












Net income attributable to non-controlling interest


(147)


(7,559)


(453)


(26,168)












Net Income (loss) attributable to AerCap Holdings N.V.


$                             (7,095)


$                             51,878


$                             95,836


$                           135,132












Basic and diluted earnings per share


$                               (0.05)


$                                 0.43


$                                 0.64


$                                 1.25












Weighted average shares outstanding - basic and diluted


147,430,663


119,386,445


148,618,178


107,936,616



Certain reclassifications have been made to prior years consolidated income statements to reflect the current year presentation.

AerCap Holdings N.V.

 Consolidated Statements of Cash Flows - Unaudited

 (In thousands of U.S. Dollars)




Three months ended
September 30,


Nine months ended
September 30,




2011


2010


2011


2010












Net income


(6,948)


59,437


96,289


161,300


Adjustments to reconcile net income to net cash provided by operating activities










Amalgamation gain


-


-


-


(31,023)


Depreciation


97,846


89,945


295,023


239,919


Asset impairment


7,752


2,761


20,485


5,482


Amortisation of debt issuance cost


8,417


7,347


25,965


19,677


Amortisation of intangibles


4,109


5,930


13,937


16,092


Provision for doubtful notes and accounts receivable


(215)


563


3,819


920


Capitalised interest on pre-delivery payments


(322)


(155)


(374)


(468)


Gain on disposal of assets


(3,976)


(6,798)


(12,814)


(36,050)


Loss on discontinued operations (AeroTurbine)


53,481


-


54,063


-


Mark-to-market of non-hedged derivatives


33,589


(5,931)


28,524


35,905


Deferred taxes


2,469


6,007


12,574


12,242


Share-based compensation


465


99


4,767


1,656


Changes in assets and liabilities










   Trade receivables and notes receivable, net


1,086


(9,459)


(14,573)


(3,308)


   Inventories


(20,496)


2,885


(20,617)


11,761


   Other assets and derivative assets


(7,466)


2,120


(40,887)


(5,516)


   Other liabilities


30,817


(1,346)


(20,514)


13,228


   Deferred revenue


1,769


9,057


(8,843)


21,054


Net cash provided by operating activities


202,377


162,462


436,824


462,871












Purchase of flight equipment


(184,823)


(467,600)


(683,209)


(1,788,962)


Proceeds from sale/disposal of assets


56,477


167,862


115,828


593,625


Prepayments on flight equipment


(17,292)


(25,979)


(33,283)


(110,759)


Purchase of subsidiaries, net of cash acquired


-


-


-


103,691


Purchase of investments


-


-


(2,500)


(7,500)


Purchase of intangibles


-


-


-


(9,006)


Movement in restricted cash


(19,695)


12,508


10,863


(61,752)


Net cash used in investing activities


(165,333)


(313,209)


(592,301)


(1,280,663)












Issuance of debt


348,746


496,126


1,482,989


2,112,408


Repayment of debt


(360,652)


(327,805)


(1,347,805)


(1,213,445)


Debt issuance costs paid


(5,440)


(12,809)


(30,052)


(48,093)


Maintenance payments received


22,550


26,078


75,252


66,485


Maintenance payments returned


(10,243)


(5,843)


(43,979)


(28,567)


Security deposits received


1,351


7,971


14,035


24,892


Security deposits returned


(7,289)


(8,187)


(33,239)


(25,315)


Repurchase of shares


(59,183)


-


(60,632)


-


Capital contributions from non-controlling interests


-


-


-


32,375


Net cash (used in) provided by financing activities


(70,160)


175,531


56,569


920,740












Net increase (decrease) in cash and cash equivalents


(33,116)


24,784


(98,908)


102,948


Effect of exchange rate changes


901


723


6,304


198


Less cash and cash equivalents of discontinued operations at end of period


(37,509)


-


(37,509)


-


Cash and cash equivalents at beginning of period


344,061


260,256


404,450


182,617


Cash and cash equivalents at end of period


274,337


285,763


274,337


285,763













Certain reclassifications have been made to prior years consolidated statements of cash flows to reflect the current year presentation.

SOURCE AerCap Holdings N.V.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.